Individuals have been engaging in Internet-based fantasy sports leagues since 2006, when the Federal Government created a specific carve-out for fantasy sports in the Unlawful Internet Gaming Enforcement Act.  However, the ability to collect monetary prizes was left to the discretion of the individual states.  While the vast majority of states allow residents to collect their monetary prizes from fantasy sports sites, Iowa’s current law, based on a case from 1931 (Parker-Gordon Importing Co. v. Benakis), categorizes all monetary gaming activities based on chance to be illegal.  It should be noted that Iowa operates lottery programs and monetary bingo games within the State, both of which are largely based on chance. While fantasy sports are not explicitly cited as illegal, the ambiguity has caused many fantasy sports sites to refrain from paying out winnings to Iowa State residents.  This could change in upcoming months.

On February 28, 2013, a bill was introduced in the Iowa House of Representatives, which would allow residents to place wagers and collect up to $500.00 per day from Internet-based fantasy sports sites. Additionally, the bill will not authorize business entities to engage in Internet-based fantasy sports, only individuals.

On Tuesday, the bill was approved by the House subcommittee and advanced to the House State Government Committee.  According to the Iowa Legislative Office, the bill is set to take effect on July 1, 2013, if everything goes smoothly.

The final adjudication of this law should be of interest to all gaming attorneys and those interested in sports gambling law in general.

If you are interested in learning more about this topic or pursuing an online fantasy sports gaming venture, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

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